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Mylan faces FTC antitrust probe over generic-thwarting EpiPen tweaks

Mylan's EpiPen epinephrine product enjoyed pricing power for years because it lacked a generic rival. Now, the FTC is investigating whether the company improperly worked to delay those generics.

Mylan’s EpiPen saga isn’t over. After a series of Congressional demands and hearings, back-and-forth with government officials, and a tentative settlement with the Justice Department over Medicaid overcharges, the company says it’s under scrutiny by the Federal Trade Commission.

The company faces questions about its tweaks to EpiPen, an epinephrine auto-injector used to deter deadly anaphylactic shock, Bloomberg reports, citing sources. The company rolled out a series of changes to the auto-injector device—and fought against FDA generic approvals for a knockoff that differed from its updated injector. The FTC is probing whether those changes were designed to improperly delay generic competitors.

“Mylan received an information request from the FTC months ago as part of a preliminary investigation,” the company said in an emailed statement. It denies any "inappropriate or unlawful actions" to delay EpiPen generics.

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The FTC investigation follows a firestorm of criticism for the Pittsburgh-based EpiPen maker. The company has raised prices repeatedly on its anaphylaxis remedy, to the point where its list price is now more than 500% higher than it was when Mylan bought the product rights in 2007.

Mylan has had the freedom to raise those prices because EpiPen lacks a direct generic competitor. The FDA rejected an EpiPen knockoff from Teva Pharmaceutical last year after Mylan filed a citizen petition questioning (PDF) the Teva device’s design. Among other things, Mylan took issue with the cap on Teva’s injector, saying it was inferior to EpiPen’s capless version. The FDA rejected that petition, but left the door open to acting on its advice.

The agency also rejected another potential rival from Adamis last year, though it was a prefilled syringe rather than an EpiPen generic.

The company itself has since rolled out an “authorized generic” that sells for $300, half the price of the EpiPen brand. Other products have made inroads as well, including Impax Laboratories’ Adrenaclick and a relaunched version of branded rival, Auvi-Q. Under a contract with CVS, for instance, Impax is selling an Adrenaclick version for one-third the cost of Mylan’s EpiPen generic.

Mylan has defended its EpiPen price increases, citing its investments in improving the product and its spending on marketing campaigns and lobbying for government rules that now require certain public buildings to keep epinephrine injectors on hand. CEO Heather Bresch made those arguments at a congressional hearing about the price hikes; she also blamed payer rebates and other drug supply chain charges for pushing prices upward.

The FTC is also investigating whether Mylan struck deals with companies working on EpiPen generics to delay their entry onto the market, Bloomberg says.

In its statement on the FTC inquiries, Mylan specifically mentioned Teva’s would-be generic knockoff. The company says Teva “has had patent licenses to launch their proposed generic alternative” since June 2015, “pending FDA approval.” That date was “years prior to patent expiry.”

But “pending FDA approval” is the key phrase, and Mylan did push the FDA to raise the bar for EpiPen generics. Nonetheless, Mylan says the company didn’t cross any lines. “Any suggestion that Mylan took any inappropriate or unlawful actions to prevent generic competition is without merit," Mylan said its statement.

Industry analysts have downgraded their sales expectations for EpiPen because of Mylan’s own generic launch and the brand’s new rivals. Early this year, Bernstein analyst Ronny Gal said he expected an $800 million hit to EpiPen through 2018 because of stepped-up competition.

Since then, Impax Labs won a contract with CVS Health to supply its own epinephrine injector, a version of its branded Adrenaclick, for $109.99 per two-pack before discounts.

Meanwhile, Kaléo Biopharmaceuticals this month relaunched Auvi-Q, another rival brand, which the company had previously sold in partnership with Sanofi. The relaunched product comes with a copay discount that takes most patients’ costs to zero—but with a list price of $4,500 for payers.

Auvi-Q was recalled for potential dosing problems in 2015, and Sanofi subsequently pulled the product from the market entirely, handing the rights back to Kaléo. Despite the relaunched med’s price tag, several payers have signed up, CEO Spencer Williamson said during a conference call about the rollout.

Mylan said EpiPen has always had rivals: “We note that the epinephrine auto-injector market is and always has been competitive, with multiple products competing on the market since we acquired EpiPen Auto-Injector.”

Mylan’s shares initially dropped on the news but were up in pre-market trading Tuesday by 2.89%.